JAKE TAPPER, CNN HOST: Thanks, Brooke. The Berlin terrorist talked about committing multiple attacks and he is still out there, still on the loose. THE LEAD starts right now.

The manhunt intensifying for the ISIS-linked terror suspect who allegedly mowed down dozens of people in a crowded Christmas market. Today new details on his links to a terror cell, on the people who may be helping him hide, and why police originally let him go.

For the first time, a reputable security firm pointing the finger directly at Russia and the Russian military for hacking the DNC and Clinton campaign chair, John Podesta. As Vladimir Putin declares himself and his armed forces the strongest on earth.

Plus, another e-cig explodes, this time it's caught on camera and had left its user with severe burns. Hazards you should potentially worry about even if you do not smoke.

Good afternoon, everyone. Welcome to THE LEAD. I'm Jake Tapper. Three days since the devastating terror attack rocked berlin. There is still no trace of 24-year-old Anis Amri, the Tunisian man German authorities say drove a tractor-trailer through a crowd at a Christmas market in the heart of Germany's capital earlier this week.

Twelve people were killed and 48 wounded including two Americans. Sources telling CNN that Amri was known to U.S. intelligence officials and had been placed on a no-fly list in this country.

CNN has also learned that German security services knew that Amri had spoken several times about carrying out an attack and at one point had been under government surveillance.

Let's get right to CNN's Erin McLaughlin in Berlin. Erin, Amri's finger prints were found inside the truck. At this point, do the German authorities have any leads on his whereabouts?

ERIN MCLAUGHLIN, CNN CORRESPONDENT: Well, Jake, it's unclear at this hour. German authorities being very careful about what information they share with the public so as not to compromise this ongoing investigation. We know that there were police raids today in the Berlin and Cologne areas.

It seems highly likely that authorities are entertaining the possibility that members of a pro-ISIS recruitment network are helping him hide.

(BEGIN VIDEOTAPE)

MCLAUGHLIN (voice-over): Tonight CNN has learned police had been tracking for months the man they suspect of mowing down 12 and injuring scores, compiling hundreds of pages of intelligence. A police informant said Anis Amri had, quote, "Spoken several times about committing attacks."

Raids continue tonight across Germany for the most wanted man in Europe. Investigators say they found Amri's fingerprints on the door of the truck used in the deadly attack, adding to their confidence that he carried it out. As more is discovered about Amri's background and his links to radical Islamists.

UNIDENTIFIED MALE (through translator): We have additional indication that the suspect is the attacker. In the driver's cab, we found fingerprints and there are additional indications to support this.

MCLAUGHLIN: The lengthy investigative file connects Amri directly to a terror cell in Germany. Other members of the group also talked of carrying out attacks, including driving a truck full of gasoline and loaded with a bomb into a crowd.

Five men connected to the cell, including a close friend of Amri, were arrested in November and charged with terrorism offenses. Two of Amri's brothers say that before he left Tunisia as a teenager he was a very different person, drank alcohol and didn't pray.

They say they believe he changed while in prison in Italy. Amri served a four-year sentence there for setting fire to a refugee center and other violent offenses. When released early in 2015, Italian authorities tried to send him back to Tunisia but officials there refused to let him back in citing improper documentation.

Instead he moved to German where he connected with an ISIS recruiting network. This year, he was arrested for trying to travel to Italy with fake documents. Police were also aware of his attempts to obtain a gun.

But German efforts to deport him back to Tunisia also failed and a judge ordered him set free. Tonight, German officials fear several people could have been involved in Monday's attack, despite all that authorities know about Amri, he remains on the run, likely armed and dangerous.

(END VIDEOTAPE)

MCLAUGHLIN: The Christmas market just behind me, the scene of the attack, reopened this morning. It was a somber atmosphere. People stopping by a make-shift memorial to light candles and play flowers, remembering the dead, an incredible seen of resilience despite so much uncertainty -- Jake.

TAPPER: All right, Erin McLaughlin for us in Berlin. Thank you so much.

[16:05:01]As we mentioned, Anis Amri, was known to U.S. intelligence officials and had been placed on a no-fly list here in the U.S. CNN's justice correspondent, Evan Perez, joins me now. Evan, how did he get on the radar for U.S. intelligence?

EVAN PEREZ, CNN JUSTICE REPORTER: Jake, German intelligence agencies provided the information on the suspect to the U.S. and then the U.S. added him to the no-fly list. We are told that German authorities identified him as part of a group of jihadist supporters operating in Central Europe.

This is a network helping to recruit fighters to join ISIS in Syria. And intelligence agencies in Europe and the United States found that some of them are communicating with suspected is members in Syria.

These are ISIS members who the intelligence agencies believe are helping to plot and to direct attacks in Europe and Turkey.

TAPPER: Evan, presumably U.S. intelligence is offering to help German authorities and European authorities. What kind of assistance can they provide?

PEREZ: Absolutely. The FBI has a legal attache in Berlin who is in touch with German counterparts and offering that U.S. assistance. There is a lot the U.S. can do to help. We saw in the attacks in Belgium and France that the NSA and the FBI were able to provide key assistance to help find some of the suspects.

And the German Services are very capable here, but you know, working with the NSA has also been very controversial in that country perhaps with this attack and the manhunt that's ongoing, perhaps they'll welcome the help this time.

The fact is that the intelligence agencies here and in Europe are very concerned that ISIS still has some command and control capabilities in Syria. They're still able to communicate and direct attacks in Europe despite the pressure in Syria and Iraq, Jake. And perhaps even because of that pressure, the authorities believe that there are more attacks on the way.

TAPPER: Evan Perez, thank you so much. Appreciate it.

Joining me now is Democratic Congressman Adam Schiff of California. He is the ranking member on the House Intelligence Committee. Congressman Schiff, thanks so much for joining us. We appreciate it. So you were just briefed on this investigation. What can you tell us?

REPRESENTATIVE ADAM SCHIFF (D), CALIFORNIA: Well, this is part of the problem we have seen in France in the past where you have people who are known to the intelligence agencies, known to law enforcement. They don't have the resources to continually surveil the suspects, even when there are very good reasons to do so.

And at some point, they're free to launch an attack. That very much appears to be the case here. As Evan was reporting, and I have no reason to doubt this, we have been informed by German intelligence of much of what they know.

We are sharing information with them as well. Our system appears to be working in terms of the precautions we need against some of these folks coming to the United States. But plainly Germany has this surplus of people, some who have returned from the fight, others, as we saw in France, who are radicalized while in prison.

It shows the magnitude of what Europe has to deal with. The other point I would make is that Germany has capable intelligence services. They by and large do a good job, but the legal challenges are enormous.

As Evan pointed out, the devotion to privacy is such that they don't always want some of the assistance we can offer and that poses some constraints. But we have a very productive working relationship with the Germans.

TAPPER: Well, let me drill down on that. What exactly do you mean? Because obviously, if we knew of -- if the U.S. knew enough about this person to put him on a no-fly list, we would not necessarily have admitted him into the United States, one would think. Was this an intelligence failure by the Germans? What do you mean when you say that they have good intelligence, but there are legal constraints?

SCHIFF: Well, I don't know if you could say it's an intelligence failure by the Germans because this suspect was very much on their radar screen. They knew a lot about him. I think it was more of a legal problem. They couldn't deport him to Tunisia.

Tunisia apparently wouldn't acknowledge that he was a citizen. So they had a problem with their deportation efforts and there was no mechanism to either around the clock surveil the person or to have some kind of detention of the person, a basis for detention.

So Germany was stuck in this place where their intel was good, they had someone of concern, and yet, they couldn't either detain the person or deport them, and they were ordered released.

TAPPER: It seems weird that Tunisia would just deny that this individual was Tunisian when you saw in that piece we just ran his family is in Tunisia. He is obviously Tunisian. You are not an expert on international law necessarily so maybe this isn't a fair question, but why are they allowed to say, no, we don't want him when he's actually Tunisian?

SCHIFF: You know, I think as a practical matter, the challenges that Germany have (inaudible) in comparison that challenges Tunisia have. Tunisia has sent per capita just about as many or more than any other country into the fight in Iraq and Syria. They're having trouble -- TAPPER: The fight for ISIS.

SCHIFF: The fight for ISIS. They're having trouble with all of those people coming back. I am sure that there is a lack of interest when they have somebody who is potentially involved in terrorism, to want to say he's one of ours, send him back because they've got plenty already in Tunisia.

TAPPER: Let's talk about the concerns that Americans watching us right now might feel, or Canadians. Is there any sort of increase risk or security alert going on right now in the United States with Hanukah and Christmas approaching?

[16:10:06]SCHIFF: There is no specific or credible information that there is a plot, say, in New York or Los Angeles against a particular target at a particular time. Nonetheless, we're always worried about copycats when something like this happens.

Are there going to be truck attacks here? Are there going to be attacks around the holidays here? So law enforcement is paying attention and taking additional steps. But there is no specific and credible information.

What I was encourage people to do, as hard as this is, is to put the threat in context. The most dangerous thing I face every day is to get on the L.A. freeway. Nothing else comes close.

So people ought to go about their ordinary business, be mindful of things, but nonetheless, not let it intrude on their appreciation of their family and the holidays.

TAPPER: So don't avoid going into a crowd or to a Christmas market- type situation?

SCHIFF: I wouldn't. You know, my family and I --

TAPPER: You wouldn't avoid it.

SCHIFF: I wouldn't avoid it. We went to the Thanksgiving Day Parade last year when there were the same kind of concerns. I would encourage people to go about their lives and not shy away from public events.

Certainly be vigilant. If people see something, they should alert authorities if they're worried about it. But nonetheless, the risks are still relatively small in this country.

TAPPER: I know it's early yet, but this Tunisian suspect had contacts with an ISIS recruiter, we are being told by German authorities. Is it possible that this was an attack that was not just ISIS inspired but maybe even ISIS directed?

SCHIFF: It certainly could be. Germany has been an ISIS target for quite some time. And for a number of reasons, among other things, it would cause real divisions within Germany, it would weaken Angela Merkel, cause a lot of strife with respect to the refugees who are there, it might turn Germans against the refugees.

And of course, ISIS wants to prompt this kind of conflict. It wants to put forward this narrative that there is no place in the west for Muslims. So Germany is a logical target for ISIS, a strategic target for ISIS.

So from that perspective, it makes sense for them to try to organize a plot there. We just don't know enough yet to make that conclusion.

TAPPER: In today's "Politics Lead," President-elect Trump tweeting about nukes and expanding U.S. capabilities. That raised some alarm bells, and now his transition team is trying to clarify what he said. Stay with us.

(COMMERCIAL BREAK)

[16:15:27] TAPPER: Welcome back to "THE LEAD. I'm Jake Tapper.

Our politics lead now. President-elect Donald Trump flushing out his White House staff this afternoon, announcing who's going to run the communication shop that blacklisted major media outlets over the course of the campaign.

RNC spokesman Sean Spicer will be the White House press secretary. Transition spokesman Jason Miller will be the White House communications director. Hope Hicks will be White House director of strategic communications. And Dan Scavino, who might remember for retweeting a number of questionable tweets during the campaign, he will be White House social media director.

CNN's Jim Acosta is in Washington with us.

Jim, some potentially huge international issues going on. Sources telling the Donald Trump transition team is talking about the possibility of imposing tariffs through executive action on foreign goods entering the U.S. Do we have any idea how big these tariffs might be?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESONDENT: They could be as high as 10 percent. But with Donald Trump, this may be just the beginning of the negotiations, not the end.

Jake, Donald Trump has kept busy in Mar-a-Lago. The president-elect and his advisers are signaling he is about to get much more aggressive on a whole range of issues from trade to foreign policy. And he is smacking down one of his biggest supporters for suggesting Trump is ready to give up on draining the swamp.

generating waves. The president-elect's team making it clear a fight is coming on trade.

TRUMP: China, which has been ripping us off, the greatest abuser in the history of this country --

ACOSTA: Sources tell CNN Trump is considering an executive action to impose up to a 10 percent tariff on imports to strengthen U.S. companies. Critics warn that could spark a trade war. But Peter Navarro, the man tapped to lead the incoming administration's new trade council, warned Trump will crack down on countries that engage in unfair trading practices.

PETER NAVARRO: Donald Trump doesn't want to slap tariffs on anybody. Neither did Ronald Reagan. But if they cheat us, he will do that.

ACOSTA: Top Republicans like House Speaker Paul Ryan have sounded cool to such talk.

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: I'll tell him what I've been saying all along. We can get at what he's trying to get at better through a comprehensive tax reform.

ACOSTA: Trump is also getting tough even with his biggest surrogates -- one day after Newt Gingrich said Trump was ready to give up on his campaign battle cry "drain the swamp" --

TRUMP: Drain the swamp of Washington. We're going to have fun doing it.

NEWT GINGRICH (R), FORMER HOUSE SPEAKER: He now says it was cute but he doesn't want to use it anymore.

ACOSTA: Trump putting Gingrich in his place stating, tweeting, "Someone incorrectly stated that the phrase "drain the swamp" was no longer being used by me. Actually, we will always be trying to drain the swamp."

Gingrich backed down.

GINGRICH: I want to report that I made a big boo-boo. I talked this morning with President-elect Donald Trump and he reminded me he likes draining the swamp. I mischaracterized it the other day.

ACOSTA: Still, other long-time Trump loyalists are being rewarded, with adviser Kellyanne Conway named counselor to the president, while Sean Spicer was selected as White House press secretary, just one of a slew of new staffing appointments.

As for Trump's other key advisers, his children, they're making moves designed to tamp down on questions about conflicts of interest. Trump's son Eric explained to "The New York Times" why he will stop directly raising funds for his charitable foundation saying, "As unfortunate as it is, I understand the quagmire."

Conway said it's a new posture that will hurt the Trump children's charities.

KELLYANNE CONWAY, TRUMP ADVISOR: The idea that these folks are trying to help people in need and those people are going to suffer now.

ACOSTA: But Trump's family is under a new microscope as daughter Ivanka found out on a JetBlue flight when one of the passengers tweeted his husband intended to harass Ivanka and her husband Jared. Passengers who allegedly made the threat were removed from the plane.

(END VIDEOTAPE)

ACOSTA: As for the idea of Trump unilaterally imposing tariffs, he may have one big problem and that is Congress. One top GOP source on Capitol Hill told me that revenue measures come from the House, as in the House of Representatives, not the White House -- Jake.

TAPPER: A lot of resistance among House Republicans with the tariffs.

Jim Acosta, thank you so much.

Turning now to our world lead. A Trump tweet this morning about nuclear weapons has foreign policy and nonproliferation experts wondering if President-elect Trump will soon lead the nation into a nuclear arms race.

CNN's Barbara Starr is at the Pentagon.

Barbara, both Trump and Russian Vladimir Putin talked within minutes of each other about ramping up nuclear capabilities.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: It's extraordinary, Jake. Both leaders talking about ramping up, but at the end of today, still not really clear what either men was talking about.

(BEGIN VIDEOTAPE)

STARR (voice-over): Did Vladimir Putin and Donald Trump just have their first nuclear standoff?

Today, Russia's president vowing more nuclear weapons are needed.

[16:20:00] VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): We need to strengthen the military potential of strategic nuclear forces, especially with missile complexes that can reliably penetrate any existing and prospective missile defense systems.

STARR: A clear shot at U.S. defense plants in Europe, something Russia believes is a threat.

Within hours, President-elect Trump tweeted, quote, "The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes."

The two declarations raising the specter of an arms race renewed. Donald Trump briefed just yesterday by senior Air Force officers on the need to modernize the aging nuclear infrastructure. During the second presidential debate, a hint of his thinking.

DONALD TRUMP (R), PRESIDENT-ELECT: Russia is new in terms of nuclear, we are old. We're tired. We're exhausted in terms of nuclear. A very bad thing.

STARR: Nuclear weapons are limited by treaty. Today, Russia has 7,300 warheads. The U.S., just over 6,900.

The Obama administration gave up on the idea of a U.S. pledge for "no first use of nuclear weapons", worried the idea could embolden Russia and China. U.S. dismantling of its own nuclear arsenal has slowed in recent years.

Putin's nuclear vow came as he boasted of Russian military superiority, after a year which saw successful Russian hacking of the Democratic National Committee by the Russian military, sustained airstrikes in Syria and continued occupation of Crimea.

PUTIN (through translator): Today, we are stronger than any potential aggressor. I repeat, any aggressor.

(END VIDEOTAPE)

STARR: Now, you know, the Trump transition team issued a statement late today saying that the president-elect was referring to modernizing the force, nuclear proliferation, and keeping nuclear weapons out of the hands of terrorists and rogue nations. Still not entirely clear whether Mr. Trump may advocate for an increase in the nuclear arsenal.

And on the question of whether Russia is in fact the strongest military, I will tell you there are many U.S. military officials tonight, Jake, who disagree with that -- Jake.

TAPPER: Barbara Starr at the Pentagon, thank you.

Joining me now to talk about Russia and cyber security and much, much more, Republican congressman from California, Darrell Issa. He sits on the House Foreign Affairs Committee.

Congressman, thanks for coming on today. We appreciate it.

REP. DARRELL ISSA (R), CALIFORNIA: Well, thank you, Jake.

I think you led in with an important issue, our aging nuclear weapons fleet. Back in 1971, '72, I was going through bomb disposal school in the Army, and the technology that they were showing us then is the technology we have in place today.

TAPPER: Let me ask you about a report from CrowdStrike, which is a cyber security firm. And they say that Fancy Bear, which is a Russian hacking group, is likely affiliated with Russian military intelligence. And they cite as evidence a piece of malware used to infiltrate Ukrainian military forces and collect artillery positions information that would be very useful to the Russian military. CrowdStrike has already determined -- they determined in June that the same Fancy Bear group had infiltrated the DNC's network in April of this year.

Does this information make you any more confident about the intelligence community's conclusion that Russia directed the hack of the DNC and the phishing and hack to John Podesta?

ISSA: Well, I think where the confidence wanes is, if you look all the way back several years ago when I was still on the Select Intelligence Committee, and we knew that cyber was an active effort by the Russians, and here we are these years later and we are not able to intercept it in real-time. We are not able to advise potential attacks in -- at a time in which they can do something, and we have no counter-measures.

So, I think I have a high confidence that the Russians and others, the Chinese and others, have successfully hacked a great many, both public and private servers in this country, and that we have not prepared the appropriate response, either defensive or offensive, and I think that's the story going into January 20th of next year.

TAPPER: As you know, the head of CentCom and others have said that Russia is the number one geopolitical foe of the United States. A recent statement by William Evanina, who's the director of the U.S. Counterintelligence and Security Center, he said that he estimates the Russians have about 100 spies on U.S. soil.

How concerned are you about Russia right now?

ISSA: Well, I'd like to say, if it's 100 Russians and we know it's thousands Chinese, I think we have to look at both. President Obama did a pivot to Asia, and that pivot was all about the expansive behavior of China.

[16:25:00] So, I think President-elect Trump is dealing with two fronts, a very activist, small power, Russia for all of its military strength has an economy about the size of Italy, and China. They're both flexing their muscle after eight years of feeling emboldened by the policies of this administration. And in fairness, the previous eight years in which much of it America was distracted with two wars.

TAPPER: The United Nations Security Council could soon vote on a resolution to demand an immediate halt to Israeli settlement activities. Our sources are telling us that the U.S. was planning to either abstain or vote yes on the measure.

What do you hope the U.S. does should this resolution come to the floor of the U.N.?

ISSA: I think we have to use this resolution as an opportunity to bring the real resolution in the region. The behavior that is known as settlements, both legal and illegal, if you will, under Israeli laws, is the result of not settling this issue, not dividing up the land into a two-state solution. Something that President Bill Clinton worked very hard on and almost achieved, and then we have had a hiatus now of 16 years now. So, no matter what happens in the U.N., the secretary of state and his

team are going to have to work on reestablishing the kind of comprehensive peace agreement that allows the Israelis to have their land, the Palestinians to have their land, and live in peace.

TAPPER: What do you make of this new nominee to be U.S. ambassador to Israel, Daniel Friedman? He has said some fairly disparaging things about J Street, which is a progressive group in the United States that works for a two-state solution, as well as a number of other things about the U.S. State Department being full of anti-Semites. What do you think of him?

ISSA: Well, I think that J Street is in fact a group that is very much outside the mainstream of American Jewish policies toward a free and fair relationship between the Israelis and the Palestinians.

TAPPER: How so?

ISSA: AIPAC -- AIPAC would be considered the center or center left group. J Street was formed because a group of pacifists felt like the progressives weren't represented. Now, having said that --

TAPPER: You think AIPAC is center left?

ISSA: I think AIPAC is center left. You know, there was a Republican Jewish coalition that was formed, in fact, to counter, if you will, a tendency of AIPAC to look to both sides but to favor one. Having said that, all these three groups and more need to have their concerns heard so that we reinvigorate the peace process, because only through getting that process going are we going to get moved beyond, if you will, a 16-year hiatus in any real negotiations by either side.

TAPPER: All right. Congressman Issa, thank you so much. Merry Christmas to you and your family, sir.

ISSA: Merry Christmas and a happy Hanukkah come Christmas Eve.

TAPPER: Thank you so much.

Next, the economic blow to North Carolina and the hits may keep on coming. We'll a talk to the incoming governor who calls efforts to repeal the controversial bathroom law a huge failure.

Plus, cameras rolling when a device in a man's pocket explodes. Now, this video is exposing a danger that you might want to know about.